Blow Off CandleI have mentioned this one a few times in the past and it's time to look at it again. This time I like it because of the blow off candle 2 days ago as it dropped below
.27 and closed there. A blow off candle is one that has high volume on a down day and you can probably guess why these occur... As the price drops, investors start to panic and start to sell their positions. This drives the price even lower and at one point or another, investors who had automatic stop loss limit orders are triggered and volume just goes thru the roof.
This was the case for Sea Drogon Energy two days ago. With close to 5 million shares traded that day, that's about 5 times the average volume for it. Now look at today's candle and we can see that the bottom of
.26 held and the price quickly moved up during the day to close at a resistance level. Again, the above average volume on it is telling me that yesterday was the shake out day and today's action was the smart money coming in.
Indicators are oversold and the Relative Strength Index has begun to turn upwards. The only thing here that I'm not too wild about is the ADX indicator being above 25. I prefer to start a position when it is below 25 but if the resistance at
.28 goes tomorrow or Friday, this could be a nice little run in a short period of time.
Entry would then be an uptick above
.28, your stop loss should be at
.255 (as to now get whipsawed if the market makers decide to make sure the weak hands are no longer in). First target on this run would be the next resistance line at
.315 for gains of 12.5% followed by what I think will be the real target on this run, the 200 SMA line. In a few days it will be around
.34 for gains of 21.4%.
See here for chart and here for other weekly picks.
Cheers!